An Agent-Based Bidding Simulation Framework to Recognize Monopoly Behavior in Power Markets

Ye He, Siming Guo, Yu Wang, Yujia Zhao, Weidong Zhu, Fangyuan Xu, Chun Sing Lai () and Ahmed F. Zobaa ()
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Ye He: Nanjing Vocational Institute of Transport Technology, Nanjing 211188, China
Siming Guo: Department of Electrical Engineering, School of Automation, Guangdong University of Technology, Guangzhou 510006, China
Yu Wang: Department of Electrical Engineering, School of Automation, Guangdong University of Technology, Guangzhou 510006, China
Yujia Zhao: Department of Electrical Engineering, School of Automation, Guangdong University of Technology, Guangzhou 510006, China
Weidong Zhu: Department of Electrical Engineering, School of Automation, Guangdong University of Technology, Guangzhou 510006, China
Fangyuan Xu: Department of Electrical Engineering, School of Automation, Guangdong University of Technology, Guangzhou 510006, China
Chun Sing Lai: Brunel Interdisciplinary Power Systems Research Centre, Department of Electronic and Electrical Engineering, Brunel University London, Kingston Lane, London UB8 3PH, UK
Ahmed F. Zobaa: Brunel Interdisciplinary Power Systems Research Centre, Department of Electronic and Electrical Engineering, Brunel University London, Kingston Lane, London UB8 3PH, UK

Energies, 2022, vol. 16, issue 1, 1-19

Abstract: Although many countries prefer deregulated power markets as a means of containing power costs, a monopoly may still exist. In this study, an agent-based bidding simulation framework is proposed to detect whether there will be a monopoly in the power market. A security-constrained unit commitment (SCUC) is conducted to clear the power market. Using the characteristics that the agent can fully explore in a certain environment and the Q-learning algorithm, each power producer in the power market is modeled as an agent, and the agent selects a quotation strategy that can improve profits based on historical bidding information. The numerical results show that in a power market with monopoly potential among the power producers, the profits of the power producers will not converge, and the locational marginal price will eventually become unacceptable. Whereas, in a power market without monopoly potential, power producers will maintain competition and the market remains active and healthy.

Keywords: security-constrained unit commitment; power market; locational marginal price; monopoly; Q-learning (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
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